Alberta, home of tar sands introduces carbon tax, plans to phase out coal power

Alberta’s NDP government in Canada is imposing new curbs on emissions from the oil sands and establishing an economy-wide carbon tax in 2017 in a sweeping new plan aimed at showing it is serious about fighting climate change.

The long-awaited strategy, which comes days before world leaders meet in Paris for a major climate summit, also includes a phaseout of coal-fired power generation in the next 15 years, a 10-year plan to nearly halve methane emissions, as well as incentives for renewable energy.

There are no hard carbon targets, but under the plan, Alberta’s carbon emissions will begin to fall under today’s levels by 2030.

The government promised the moves would be revenue-neutral, and all money would be reinvested in the province on such things as new technology to fight pollution and into a new “adjustment fund” to help affected families and businesses deal with the changes.

Alberta’s climate-change strategy was released only hours before Ms. Notley was set to meet with Canada’s other premiers and Prime Minister Justin Trudeau in Ottawa on Monday. That group will be headed to Paris for the summit. “Alberta is showing leadership on one of the world’s biggest problems, and doing our part,” Ms. Notley said in statement.

Ms. Notley’s six-month-old government says the lack of a wide-ranging climate policy has hampered the province’s energy industry as it has tried to persuade the United States and other trading partners to accept more shipments of crude from the oil sands.

Indeed, U.S. President Barack Obama said early this month that his country’s efforts to battle climate change would be tarnished by approving TransCanada Corp.’s Keystone XL pipeline that would ship Alberta oil to Texas refineries. He rejected it after seven years of review.

The energy sector had warned that any onerous new costs would be disastrous for an industry under severe financial pressure due to the collapse in crude oil prices.

Still, the plan won endorsements from some of the energy sector’s top executives, including Suncor Energy Inc. Chief Executive Steve Williams, Cenovus Energy Inc. CEO Brian Ferguson and Canadian Natural Resources Ltd. Chairman Murray Edwards, who had been among the sharpest critics of the NDP’s economic policies.

“The framework announced will allow ongoing innovation and technology investment in the oil and natural gas sector. In this way, we will do our part to address climate change while protecting jobs and industry competitiveness in Alberta,” Mr. Edwards said in a statement.

New measures in the policy include:

– A cap of 100 megatonnes on carbon emissions from the oil-sands sector, which had been Canada’s fastest-growing source of emissions, once new rules are adopted. It currently emits 70 megatonnes annually.

– An economy-wide tax of $20 per tonne on carbon-dioxide emissions starting in 2017, rising to $30 in 2018. Equal to seven cents per litre of gasoline. The average household will see heating and transportation costs increase by $470 annually by 2018 under the new rules.

– A phase-out of coal-fired power by 2030.

– Incentives to promote more use of renewable energy sources as well as to improve energy efficiency. The province is aiming for nearly a third of its power to be generated from renewables such as wind and solar power by 2030.

The NDP devised the new strategy with data from research conducted by a panel it appointed, led by University of Alberta economist Andrew Leac

The Globe and Mail: Nov 2015

Key Words: Climate Change, international
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